Can someone help out with a step by step solution of the below problems? I am trying to understand what I am doingthis is getting really confusing for me which is why a step by step is helpful.
1) A firm has the following investment alternatives: Cash Inflows Year A B C 1 $500 $0 $0 2 500 400 0 3 500 800 0 4 600 900 1,900 Which investment should be considered? (for any credit, show your work). Use a 9.5% discount rate. Hint: A discount rate gives you the clue that you should perform a present value analysis on each investment.
2) A firm has 40,000,000 in revenues, 12,500,000 in fixed costs, 10,250,000 in variable costs, and interest of 2,000,000. Compute (for any credit, show your work): a) DOL b) DFL c) DCL.